Bank branch closures: are banking hubs the answer?

The industry says fewer people are going into branches and closures just reflect that reality. But it’s come under pressure to make sure customers can still access banking services when they need them. Banking hubs have been proposed as a possible solution.

Number of bank branches 2010 to 2020

The New Zealand Bankers’ Association and six banks – ANZ, ASB, BNZ, Kiwibank, TSB and Westpac – are involved in a banking hub trial in four locations: Martinborough, Ōpunakē, Stoke and Twizel.

The hubs provide an ATM, phone banking and tablets for online banking. Support staff are available to help customers use the service but they can’t provide advice on bank products, such as savings accounts and loans.

The trial started in November 2020 and will run for a year.

At Martinborough’s banking hub

We headed out to the Wairarapa to visit the Martinborough banking hub. It’s located in the Waihinga Centre, which is also home to the town’s visitor information centre, Plunket, library and café.

Along with a smart ATM, there were three desks that each had a phone and an iPad for internet banking.

The visitor centre manager said about six customers come in each day to use the hub. If there’s a big event in town, numbers rise to about 30 customers.

South Wairarapa Mayor Alex Beijen said the hub hadn’t solved problems for everyone.

Branch closures have had a negative impact on the community, he said.

Closures can affect people who are less familiar with online banking and those who need extra support to use banking services. Local businesses also need branches open to make deposits or get coins for the till, Beijen said.

He points out it’s a 30-minute drive from Martinborough to Masterton, the closest town where all the big banks have branches. For a round trip, it’ll take an hour and a half, or “if you’re working, take half a day off work”.

Rural Women NZ board member Sharron Davie-Martin said she’s also aware of branch closures being an issue for her members. Some have to drive more than an hour and a half to get to their nearest branch, she said.

What’s happening next?

New Zealand Bankers’ Association chief executive Roger Beaumont said it will be assessing the effectiveness of the hubs at the end of the trial. As well as monitoring the number and type of transactions at the hubs, it will be holding community focus groups to get feedback.

“We will have a full picture of how the trial went at the end of the year when it concludes. We’ll then be able to determine its success, or otherwise, and announce next steps,” Beaumont said.

Banks involved in the trial had agreed not to close any more regional branches until the trial ended. But that commitment was suspended in January due to Covid-19 and a further 106 branches have been closed or announced pending closures. Banks have since renewed their promise to not close any more regional branches until the trial finishes.

Have you been affected?

Have you been affected by a bank branch closure? Let us know. Email nikki-lee@consumer.org.nz.